Nike Inc. on Thursday reported fourth-quarter profit that came up short of Wall Street’s expectations, with price cuts weighing on results amid weaker demand for sneakers and clothing.
Nike
NKE,
+0.30%
reported fourth-quarter net income of $1.03 billion, or 66 cents a share, down from $1.44 billion, or 90 cents a share, in the same quarter last year. Revenue rose 5% to $12.83 billion, compared with $12.23 billion in the prior-year quarter.
Analysts polled by FactSet expected Nike to report adjusted earnings of 68 cents a share, on $12.58 billion in sales.
Nike said gross margins slipped 140 basis points to 43.6%, dragged by “higher product input costs and elevated freight and logistics costs, higher markdowns and continued unfavorable changes in net foreign currency exchange rates.”
Shares were up 0.3% after hours on Thursday.
Heading into the earnings, Wall Street had questions about Nike’s stockpiles of unsold shoes and clothing, and what it might take to clear them, as consumers still find themselves stretching their budgets to buy more essential goods like groceries.
Nike’s broader plans to sell more shoes and clothes directly — either through its own e-commerce platform or its own physical stores. But recent plans to start selling again in Macy’s Inc.
M,
+3.35%
and Designer Brands Inc.’s
DBI,
+4.01%
DSW shoe stores have raised questions over whether the athletic-gear maker is rethinking that strategy. Analysts were also focused on demand in China, whose re-opening from COVID-19 shutdowns remains in flux.
Shares of Nike have risen 9.6% over the past 12 months. By comparison, the S&P 500 Index
SPX,
+0.45%
has risen 15% over that period.
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